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Indian ADRs jump to 3-year high as exit polls point to BJP win

LiveMint logoLiveMint 12-05-2014 Rajhkumar K Shaaw

Mumbai: Indian stocks headed to a three-year high in New York and rupee forwards advanced after exit polls showed the National Democratic Alliance (NDA) led by Narendra Modi probably won the most seats in Lok Sabha elections.

The Bank of New York Mellon India ADR Index jumped 3.2% to 1,291.35 at 10:35 am local time, poised for the highest level since April 2011. One-month non-deliverable forwards (NDFs) on the rupee gained as much as 0.8%. The S&P BSE Sensex climbed 2.4% to a record 23,551 in Mumbai on Monday and the rupee touched a nine-month high before the exit-poll results. The 50-stock CNX Nifty Index rose 2.3% to an all-time high.

The Bharatiya Janata Party (BJP)-led alliance is estimated to have captured 261 to 289 seats, according to two exit polls released on Monday, with 272 needed for a majority. The Sensex has beaten peers in Brazil, Russia and China this year as investors bet that a Modi-led government will do more to revive an economy growing at near the weakest pace in a decade. Actual election results will be released on Friday, 16 May.

The Nifty may rally 5% this week if the exit polls show the BJP-led alliance getting close to 272 seats, U.R. Bhat, managing director of India unit of the UK-based Dalton Strategic Partnership LLP, said by phone from Mumbai.

The Sensex has risen 19% since 13 September, when the BJP named Modi as its candidate for prime minister, while the rupee has gained 5.7%. Global investors have plowed more than $10 billion into local equities and bonds this year.

Accuracy of Polls

The BJP and its allies are estimated to have won 289 seats, compared with 101 for the Congress group, Bloomberg TV India reported, citing a Cvoter exit poll. The BJP bloc probably won 261 to 283 seats, according to an India Today exit poll, while the Congress-led alliance won 110 to 120 seats. No margin of error was given for either poll.

In the last two elections, exit polls have overestimated the strength of the BJP, by about 30 seats in 2009 and as many as 70 seats in 2004. Congress’s surprise win to take power in 2004 led to the biggest one-day sell-off of stocks in more than four years, while its re-election in 2009 lifted the Sensex by a record 17% in its next session.

Nine rounds of voting started on 7 April to pick 543 parliamentary seats in the world’s second-most populous country. Turnout averaged a record 66.4%, the Election Commission of India said on Monday, compared with 58% in the 2009 election and the previous high of 64% in the 1984 vote. Bloomberg

Andrew MacAskill in New Delhi and Shikhar Balwani in Mumbai also contributed to this story.

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